The Construction Counselor

It has long been the rule that a general contractor does not owe a duty of care to employees of subcontractors absent some exception. However, that rule has not always been consistently applied by district courts and juries. Last week, the Iowa Supreme Court resoundingly reaffirmed this principle where an injured employee of a subcontractor suffered a worksite injury and then sued the general contractor on the project. In its opinion, the Iowa Supreme Court vacated a jury verdict entered at trial against the general contractor-homebuilder, finding it had no liability. The Court took the opportunity in its 22-page opinion to better define the general lack-of-duty rule for general contractors and the limited scope of exceptions to it. This decision is a significant win for general contractors in Iowa and is otherwise highly instructive for both general contractors and subcontractors. Fredrikson attorneys Jodie McDougal and Brandon Underwood served as co-counsel for the general contractor at the lower court level.

Background Summary:

The litigation arose from a worksite injury suffered by an employee of a subcontractor on a new home construction project involving a partial collapse of a trench. The general contractor was not present at the time of the incident nor controlled the day-to-day operations of the plumbing subcontractor who dug the trench. The injured worker-plaintiff received workers’ compensation benefits from his employer (the plumbing subcontractor) — with such benefits being his exclusive remedy against his employer under Iowa law — and then the plaintiff pursued a claim for negligence against the general contractor-homebuilder, as well as claims for gross negligence claims against three of his coworkers at the plumbing company that were settled prior to trial.

At the lower court level, the general contractor asserted that it could not be held liable because, as the general contractor, it did not owe a duty of care to the injured worker as it did not retain any control over the subcontractor’s day-to-day work, which was confirmed by the language of the subcontract entered by the parties. The District Court denied that argument and allowed the case to proceed to trial, with the jury entering a judgment against the general contractor at trial.

The Iowa Supreme Court’s Decision:

The Iowa Supreme Court disagreed with the District Court and upheld the rule that a general contractor does not owe a duty of care to employees of independent contractors, vacating the jury verdict and dismissing the claims against the general contractor as a matter of law.

The Iowa Supreme Court emphasized that Iowa has long recognized that a general contractor typically does not owe a duty of care to the employees of a subcontractor, unless one of the narrow exceptions exists. In other words, as phrased by the Court in this decision, “[a] passive supervisory role fails to impose responsibility on the general contractor for the details of the work it hires a subcontractor to manage and execute.” Instead, “[r]esponsibility rests with the subcontractor, given its specialized expertise and control over the day-to-day operations of its work.” The Court found that not only is this scope of responsibility fair, but it also best upholds safety; “[t]he subcontractor, not the general contractor, is usually in the best position to reduce risk and prevent injury to its own employees.” Thus, the Court determined that some exception must exist for the general contractor to be liable.

The injured worker-plaintiff cited two exceptions to the no-duty rule. First, a general contractor may still be liable when it retains control over the subcontractor’s work. Though, as the Court noted, this control must be more than a general control to start and stop the subcontractor’s work or otherwise supervise the subcontractor. Instead, it must be control over the details of the work, i.e. the subcontractor’s day-to-day operations. Here, the Court found that the general contractor had not retained such control, but instead entrusted its plumbing subcontractor under their subcontract to handle and oversee the plumbing, including trenching. Thus, with respect to its own employees, it was the subcontractor’s responsibility to oversee trenching safety.

Second, a general contractor may also be liable when the work at issue involves a “peculiar risk” that cannot be mitigated with ordinary caution. In other words, some forms of work are so inherently dangerous that responsibility for safety cannot be delegated. However, that danger must be exceptional and persist even when the work is performed properly. In its decision, the Iowa Supreme Court reaffirmed its decision from thirty years ago — in Robinson v. Poured Walls of Iowa, Inc., 553 N.W.2d 873 (Iowa 1996) — that trenching on residential construction projects does not pose a peculiar risk.

As a result, the Iowa Supreme Court unanimously concluded that the general contractor did not owe a duty of care to the injured worker as an employee of its subcontractor and the suit against it was dismissed.

What This Decision Means for the Industry:

This decision clearly reaffirms the limited scope of a general contractor’s liability as it relates to the safety of its subcontractors’ employees on construction projects. Absent retaining control over the day-to-day work of a subcontractor or the work itself posing an inherent danger, general contractors are not liable for injuries sustained by employees of subcontractors. Instead, independent contractors themselves are responsible for ensuring safety within the scope of the work that they take on and overseeing the safety and wellbeing of their own employees.

That said, it is important to remember the no-duty rule in this liability context does not mean general contractors have no duties in regard to OSHA compliance across the entire worksite. Instead, under OSHA’s Multi-Employer Citation Policy, multiple employers on a shared jobsite can be cited for the same alleged OSHA violation, even if their own employees were not directly involved, such as when the general contractor is deemed by OSHA to be the “controlling employer.” Per OSHA’s rules, general contractors, as the controlling employer, are expressly required to initiate and maintain “frequent and regular inspections of the job sites, materials, and equipment . . . by competent persons designated by the employers.” 29 C.F.R. § 1926.20(b)(2). OSHA’s multi-employer citation policy, and our best practices advice in that regard, are discussed in depth in my prior blog “Navigating OSHA’s Multi-Employer Citation Policy: General Contractor Considerations.” Understanding this policy is essential for managing risk and maintaining compliance.

Key Takeaways:

• General contractors are not liable absent retained control or a qualifying “peculiar risk.”
• Courts will closely examine contract language and actual control.
• OSHA obligations remain unchanged under the multi-employer policy.

If you have questions about this decision or its implications, please contact Jodie McDougal or Jack O’Brien.